Sunday, May 27, 2018

Saudi Arabia Shuts Down Business with German Firms

When President Trump canceled President Obama’s Iran nuclear deal Western European leaders were horrified. They were almost as horrified as the American progressive media.

For Germany’s Angela Merkel, it was all about business. Like her confreres in Paris and London, she wanted to preserve business deals with Iran. To hell with the rest of it. These countries assume that the big boys in the schoolyard, i.e. the United States will deal with Iran’s support for terrorism, its ballistic missile program and its yearnings for nuclear weapons.

Fair enough… if you want to define yourself as junior partners in an alliance.

Now, we read in Der Spiegel, another country has expressed its serious displeasure at Iran’s bias toward the JCPOA and against America. That country is… Saudi Arabia.

We all suspected that Trump would not have canceled the Iran deal and even the move of the American embassy in Israel to Jerusalem without some sense that the Saudis did not object too strenuously. Now, on the Iran deal, Saudi Arabia has told Germany that it could do business with Iran if it liked, but it could not also do business with Saudi Arabia. Poof.

Der Spiegel reports on how this is effecting a German business called Detlet Daues:

Detlef Daues is a pioneer of the German small- and medium-sized companies that have made Germany what it is today: a prosperous nation with good international relations that stretch to even the farthest-flung corners of the world.

His Hannover-based virtual department store for original replacement parts, V-Line GmbH, services customers in countries like Mexico, the United States, Qatar and Oman in addition to others in East Asia. But 65 percent of Daues' revenues come from Saudi Arabia.

Quietly, Saudi Arabia has shown its displeasure with German policy:

But currently, the once-positive relationship between Saudi Arabia and Germany has worsened. Six months ago, Riyadh withdrew its ambassador from Germany and he still hasn't returned. There has been little open discussion of the reasons behind the conflict, but for people like Daues in the business community, the rift is as plain as day. "For Germans, the doors in Riyadh have suddenly been closed," says one experienced businessman in the Saudi capital. Meetings with delegations from Germany that were set up before the crisis are being canceled. "That hurts," says Oliver Oehms of the German-Saudi Arabian Liaison Office for Economic Affairs in Riyadh.

More specifically:

But now the "German government has succeeded" in "upsetting the country so badly that German firms are being excluded from being awarded contracts," the entrepreneur wrote in a letter to Bernd Althusmann, the economics minister for the state of Lower-Saxony, where his company is located. He wrote that he had been deliberately excluded from contracts for the first time.

Evidently, the chill has been a long time coming:

Young crown prince Mohammed bin Salman, known as MBS for short, appears to be "deeply offended" by the German government, says Daues, who adds that his information comes from confidants in Riyadh. Relations between the two countries began souring last November when then-German Foreign Minister Sigmar Gabriel spoke of spreading "political adventurism" in the Middle East, a remark many thought was aimed at Saudi Arabia. The impression was widespread at the time that Lebanese Prime Minister Saad Hariri was being held against his will in Riyadh and that he was being strong-armed by the rulers there to step down.

But the canceled Iran deal has deepened Saudi distrust of Germany:

Berlin is determined to stick with the nuclear deal despite U.S. President Donald Trump's announcement he will withdraw from it, whereas there is deep-seated distrust of the government in Tehran in Riyadh. It may be that the Saudi crown prince views Germany's conduct as criticism of his governance. Sources close to him say that a relaxed attitude toward differences of opinion is not one of the prince's strong points.

It gets worse for Germany. Der Spiegel has the details:

Germany remains Saudi Arabia's most important European trading partner. Some 800 German companies are active in the country, and 200 have offices in Saudi Arabia with a total of 40,000 employees. In 2017, the volume of German exports to Saudi Arabia was 6.6 billion euros. But the mood is shifting.

Well-informed observers in Saudi Arabia are reporting that even larger German companies like Daimler have been affected. The Saudis, for example, threatened to temporarily postpone the delivery of several hundred Mercedes buses. Officially, the company has vehemently denied the reports, with Daimler saying it cannot confirm any delay. The bus project, the company insists, is proceeding on schedule.

The Saudi Health Ministry, which has worked closely together with medical equipment supplier Siemens and pharmaceutical companies Bayer and Boehringer for years, has also distanced itself from its German partners recently. "The business is tougher," a spokesman for Siemens says in a cautious formulation. "We don't want to comment on the matter," spokespeople for Bayer and Boehringer stated. No one wants to further rile the government in Saudi Arabia. Recently, Riyadh's city development authority ADA issued a contract for the construction of a major bike path that will run through the capital city's green belt to the American architecture firm Coen+Partners. But only a year ago, it had planned to award the contract to the German firm AS+P Albert Speer and Bödeker Landscape Architects.

Of course, the story has been ignored. The American media has gotten its knickers in a twist over the supposedly deteriorating relations between Trump and Merkel. As often happens, given its blinders, it is missing important aspects of the larger story.

1 comment:

Sam L. said...

I suspect Saudi Arabia has much more money than Iran. Merkel should notice.